In chapter 13 bankruptcy, the majority of your debts are consolidated into an affordable payment by your attorney. You make these payments to a trustee over a specified time period. This particular bankruptcy is preferable to Chapter 7 in my opinion. One of the primary reasons is that creditors view Chapter 13 bankruptcies less harshly than other types. You are primarily endeavoring to pay back your debts. You can obtain a mortgage if you have a credit score of 13 or higher. If you have filed for Chapter 7, you cannot obtain a mortgage for typically two years.
Chapter 13 remains on credit reports for seven years. A 7 remains for ten years. So you can see how a 7 will affect your credit rating versus a 13. Generally, 7 seems like the best option, but you should reconsider before filing. Due to the credit impact of each option, the last thing you want to feel is regret after making a decision.
In Chapter 7, all debts are discharged and there are no repayment requirements. When you file Chapter 7, your credit score is severely affected. This particular bankruptcy is the final blow to your credit score. This bankruptcy will remain on your credit report for ten years. There are circumstances in which you must file a 7-K.
But if you're not required to file, don't. It takes longer to recover from this bankruptcy, and lenders dislike seeing it on your credit report. Typically, it is simpler to rebuild credit with 13 than with 7. Consequently, I believe you understand how your credit is affected in either scenario. If possible, it is always preferable to repay your debts rather than declare bankruptcy. Just keep in mind that your credit is your livelihood.""
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